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Things to know before opening a demat account

by Soft2share.com

The demat account is a much-discussed account in the share market. For every trader as well as an investor it is a mandatory account to have. For a common man, it may be something new particularly one who has never entered the streets of share market. There are various investments one can go for as far as the stock market is concerned. Before you move ahead, you have to gather proper knowledge about the demat account. What is Demat account? And how is it going to be beneficial for the investors or the traders? Demat is nothing but the short version of dematerialized account on the internet. In earlier days investors used to keep their shares and stocks as a physical form. But the days are over; Demat is a new and advanced process to keep all these assets in an electronic form.

Different advantages of the demat account

A Demat account can store all sorts of investments an investor makes in shares, bonds, mutual funds, government securities, exchange-traded funds, all in one place. Dematerialized help investors by converting all these physical share certificates, documents, and assets into an electronic form. There are many advantages of demat account. These points will help you to get proper knowledge about the benefits of having a demat account for all your shares and stocks. The advantages are:

  • There are many setbacks regarding physical share certificates. By having a demat account, you can avoid all these drawbacks.
  • A demat account also helps you to ignore all kinds of stamps duty and filling up of transfer deeds.
  • One of the prime advantages of having a demat account is all the share right/bonus, which is assigned to the investors, will be credited to the investor’s account immediately.
  • One of the biggest advantages is because the demat account has all data in an electronic form there is no threat of the loss of those data. Investors don’t need to worry about theft and disfigurement.
  • The transaction costs are much lower than physical forms.

Learn more about demat account

Now you know various types of advantages or benefits of having a demat account in India. There are many companies and sources offering demat accounts, but it’s up to you to choose the best demat account which will be suitable for your investments. You can have a range of plans to choose from, the most fundamental plan is known as flat pricing plan. In this plan, the brokerage stays the same. Other plans have volume-linked costing where the brokerage keeps coming down as the capacity of trade goes above up to a certain limit. Investors who trade around this verge limit, it suits them. The pricing may vary from time to time. There are plans for equity investments where it can be 0.50 percent or a minimal amount of Rs.25 on both sell transaction and buy values.

There are many other benefits also of having a demat account like the first year annual maintenance costs are nil. With demat account; the first five trades are free with no DP charges. Create a Demat account today.

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